Pakistan is going to sign trade agreements with Uzbekistan next week to explore over $90 billion exports potential of Central Asia and to achieve the $35 billion exports target set for 2021-22.
“For the purpose of Central Asian connectivity, Prime Minister Imran Khan is leaving for Uzbekistan on July 13, 2021. During his three-day visit, Pakistan and Uzbekistan will sign Transit and Preferential Trade Agreements,” said Adviser to the PM on Commerce Razak Dawood on Sunday. The adviser was talking to the Karachi-based members of the Council of Economic and Energy Journalists (CEEJ) in Islamabad.
He said both the countries have agreed to allocate dedicated spaces in Gwadar and Tashkent for establishing warehouses to help each other in the transportation of goods to other regional countries
“We have planned to transport goods under the TIR Convention because the first-ever truck from Uzbekistan reached Pakistan under the TIR Convention in 48 hours. The government is contemplating offering loans to the transporters to update the country’s dilapidated logistics network,” Dawood said.
Using tariff rationalization as an instrument of growth, the government has made products exports competitive in the federal budget 2021-22 by rationalizing the tariff lines of over 4,000 raw materials, comprising around 42% of total imported raw material.
He said the focus areas for tariff rationalization are active pharmaceutical ingredient (API), poultry, engineering, and textile. “The tariff of packaging raw materials, iron and steel, agricultural products would also be rationalized in the next fiscal year,” Dawood said.
Talking about the restructuring of the Trade Development Authority of Pakistan (TDAP), he said some 10 commercial councilors have been removed since September 2018 due to poor performance.
Now the officials, who used to have country-based responsibilities in TDAP, have been assigned product-based responsibilities to improve their performance.
“Under the Strategic Trade Policy Framework, the incentives are now linked with product diversification and now the exporters have to show more diversification in their products to get more incentives from the government,” he added.
The adviser said Pakistan has witnessed record-high exports of $25.3 billion, including $15.5 billion in textile and $2 billion in IT services in the fiscal year 2020-21. The export is nearly $4 billion higher than the $21.4 billion achieved in 2019-20.
While admitting the impact of the Covid situation on the record-high exports, Razak advocated a “high-target, high-achievement approach”. He said the government has set a $35 billion export target, including $28 billion for goods and $7 billion for services for the current fiscal year 2021-22.
“We know it would be a Herculean task to achieve because the world is opening and everybody is going to get into the export market but everybody should work and try to achieve it,” he said.